Monday, May 20, 2013

Here's
a good reason to cancel the debts of impoverished countries: in many cases,
their populations never chose to borrow the money in the first place.

This
is a supposedly radical notion.Lots of
institutions and global actors, from the World Bank and IMF to western
politicians to non-profit organizations, talk about “debt relief,” but very few
talk about the legitimacy of the debt to begin with.Debt relief or forgiveness is packaged as a
sympathetic bit of charity from the West to the world’s poor, an act of kindness
that is usually attached to demands made of the recipient government.Those demands range from the hypocritical (“stop
subsidizing your farmers…only we get to do that”) to the patronizing (“demonstrateto us in writing how you will properly spend your own money that we are allowing you to keep”) to the counter-productive (“commit to austerity…”).

Even
those actors sympathetic to the cause of debt relief because of the impact it could have, including increased spending on health, education, and infrastructure
and the accompanying decline in preventable mortality, often shy away from
making the claim that debt relief should be a right and not a privilege.This not only lets numerous people off the
hook who should not be let off the hook, it is a complete distortion of
history.And history matters.

In
Africa, the vast majority of debt was accrued in the 1970’s and 1980’s under
dictatorships, many of which were tossed from power in the 1990’s.The lending that created this debt financed
many things, but was almost universally processed through un-democratic
channels.In many cases, it financed the
dictator’s personal consumption habits.In many cases, it financed the repressive organs of the state, which in
turn suppressed dissent and preserved the dictator’s power.In many cases, it was used to dispense
patronage to internal actors who might otherwise have challenged the status
quo.In the end, this lending helped
perpetuate the rule of tyrants while doing significantly more harm than good
for the populations subjected to that rule.It funded weapons that killed children, “development” projects that destroyed communities, and further enriched some of the richest people on earth
at the expense of some of the poorest.This is the debt that developing nations are being asked to pay back today.

In
fact, the story of debt in Africa is so uniform across so many countries as to
allow for the discernment of a system at work.Foreign nations help a dictator take power for political reasons, and
then fund his regime to ensure it can repel any attempt at a change in
government.Lending funds the security
services, the patronage network, and the dictator’s personal spending habits,
which become very lavish, very quickly.Resource extraction is streamlined at the expense of the domestic
economy and to the benefit of multi-national corporations while structural
adjustment programs imposed as part of debt restructuring agreements crater the
middle class and the civil service.With
the economy in free fall, money starts to flow outward in the form of capital
flight, further draining the economy and obliterating the tax base.Protests are squashed with external support.Banks lend money knowing full well it will be
stolen because they make money off the lending anyway.Governments send arms and soldiers to assist
brutal tyrants.And then, when it’s
finally all over and the nightmare of dictatorship is somehow broken by the
will of the people, the banks and the rich governments and the multi-lateral
institutions cough loudly and ask to be paid back.

Speaking
of Africa as if it is a single place is, of course, absurd; this is a massive
continent of enormous ethnic, religious, racial, social, and cultural
diversity.And yet this same scenario played
out over and over again.It happened in
South Africa, where western institutions now demand that the ANC repay the
debts of its Apartheid predecessors.It
happened in Rwanda, where France systematically armed and supported the
genocidal regime around President Juvenal Habyarimana; today, Rwanda’s
government, whatever its faults, continues to pay off the debts of its
murderous predecessor.It happened in
Somalia, where a brutal dictatorship armed alternatively by the Americans and
the Soviets was replaced by two decades of famine and anarchy, and where the
newly emerging government is being lectured by the IMF to pay back what “it” “owes” to the West.

And,
on an unimaginable scale, it happened in the Democratic Republic of the Congo,
where America’s favorite “anti-communist” dictator, Mobutu Sese Seko, looted
his country for more than thirty years, leaving it in ruins.Mobutu stole billions during his time in
office, funneling money from kickbacks, loans, fraudulent development projects,
and even straight from the country’s budget into his own pocket.He spent state money to take his inner circle
to Disneyworld and to ferry, on multiple occasions, a number of sheep from
Venezuela to his personal farm in the DRC.When asked if it was true, despite the suffering of his people, that he
was the fourth richest person in the world, Mobutu became indignant and
proclaimed, “no, no, no! I am the third
richest man in the world!”When the
rebel Rwandan Patriotic Front began to advance on his good friend Habyarimana
and his genocidal Hutu Power clique, Mobutu lectured him by saying “I
told you not to build any roads…building roads never did any good…I’ve been in
power in Zaire for thirty years and I never built one road.Now they are driving down them to get you.”This is the man George H. W. Bush invited to
the White House before any other African leader (he had at least 45 other
options).This is the man Ronald Reagan
declared was a “consistent voice of good sense and good will.”

When
Mobutu was forced from power, the DRC was more than $12 billion in debt, while
the former dictator was rumored to have as much as $8 billion in personal
wealth stashed abroad.The new Congolese
government set about to recover this wealth, claiming correctly that it
belonged to the Congolese people, but Swiss banks were sadly unable to recover
much of it.In Malawi, a similar
situation unfolded after the death of autocrat Hastings Banda.The banks told the Malawian government that
they would be happy to investigate Banda’s riches if the government could
simply produce a death certificate.Sadly, this certificate went “missing.”None of this should be surprising.After all, if Swiss banks just handed over their clients’ money simply
because it was stolen from orphans and teachers and farmers, they wouldn’t be Swiss banks.

The
creditors (banks, governments, multi-laterals) bear much of the responsibility for
this system, of course, a fact I covered in more detail here.But if we are keeping up the charade that
these debts are owed to somebody, then the people who need to pay them back are
the Mobutus and Bandas of the world.Their money is somewhere, and somebody is profiting from it.To claim that these debts are somehow
legitimately tied to the people of Malawi or the DRC is nonsensical.To say that these dictators represented their
people in any way that carries any validity in the real world is equivalent to
suggesting that Stalin was the legitimate representative of post-war
Poland.When you conquer a country and
subjugate its people, does it really matter whether you live there yourself or
not?

Jubilee
USA is one organization that gets it.While advocating for the one-time cancellation of all debts, a concept with
biblical precedence, Jubilee also argues consistently that much of the debt
owed by developing nations is illegitimate, a fact that puts phrases like “debt
relief” and “debt forgiveness” into a very different light.The fact that Jubilee is an incredibly
effective organization run on a tiny budget lends additional moral credibility
to its calls for change.Donations are helpful, of course, but there are lots of ways to get involved with Jubilee’s work.

Hastings Banda once called his political opponents “food for
crocodiles.”Margaret Thatcher once
called Banda’s government “one of our closest friends.”In short, the West helped feed Africa’s people
to the crocodiles, then peered inside the belly of the beast and yelled “don’t
forget to pay us back for all the money we spent raising crocodiles!”In fairness to the creditors, they are owed quite a bit of money.After all, as Mobutu taught the world so vividly,
one can spend an absolute fortune flying sheep around the world on private
jets.

Thursday, May 9, 2013

Recently a friend of mine asked me my opinion on
whether or not donating aid to Africa is actually helpful for Africans.
He is involved in a church project that donates supplies to Swaziland,
he said, but he didn't know if his help was doing any good and he
figured he would ask around for perspectives. I told him that I had no
idea, of course, exactly what the impact was of donating goods to
Swaziland, but I did know that Swaziland is ruled by a corrupt King who
suppresses democratic rights, owns a hugely disproportionate share of
his country's wealth and, for what it's worth, occasionally marries
teenage girls against the wishes of their parents.

If you want to help Swaziland, I argued, the
best way might be to pressure Coca Cola, the largest multi-national
invested in the country, to pressure King Mswati to open up the
government. Until that happens, there is little hope for economic
reforms that will benefit the population as a whole and that would
negate the need for donations from people living ten thousand miles
away.

My friend said he understood that, but there was a
problem. "I want to help," he said "and that's not really the way I
envision helping. If I'm completely honest with myself, I envision
flying into the jungle on a helicopter and saving people."

While my friend deserves credit for being honest about
this, his admission that this urge is potentially self-serving is
entirely accurate. He's also not alone. From Kony 2012 to "Save the
Children" to the adoption craze rising and then crashing and burning in
country after country, it is evident that many in the West see their
role vis a vis Africans as one of spiritual, physical, and societal
salvation. For those in the West wanting to help Africans living in
poverty, understanding this dynamic and its implications has to be the
first step.

To be clear, wanting to help people is obviously a good thing,
and people who want to help should be commended, not condemned. The
old saying about the road to hell being paved with good intentions was
clearly not coined by somebody familiar with Africa's post-colonial
history; Africa's road to poverty and conflict has been paved by people
with decidedly bad intentions, from Joseph Kony to CIA operatives, from
the executives at Shell Oil to the architects of Hutu Power.

But good intentions are not enough. Donated goods can
undercut local economies, enrich warlords, and even exacerbate the very
problems such donations are intended to solve. On a macro-level,
millions of dollars of aid from western countries to African nations
doesn't seem to have demonstrably improved the lives of Africa's
people. All of which is very frustrating to the person in the West who
just wants to help.

So how can Westerners help?

Answering that question begins by asking a different question: why do some people in Africa need help in the first place?

To
the World Bank, and other major practitioners of "development,"
Africans need help because they are lacking technical expertise and
resources. In Lesotho, for instance, anthropologist James Ferguson
described how the World Bank undertook an enormous project aimed at
connecting a rural area to the rest of the country in an effort to
improve local herders' ability to sell their livestock at the market.
Clearly, if only these Africans knew how to better leverage their
resources and if only they had the money to build a road, their lives
would dramatically improve!

Well, as it turns out, the men of the area didn't want
to sell their livestock because the disposable income would then be
turned over to their wives while the men were away working in South
Africa as seasonal laborers. They very much preferred to use the
livestock to barter within their own community. As for the road, the
major change it seems to have accomplished is the extension of state
power over an area that otherwise had been spared the day-to-day
manifestations of the machinations of a corrupt party apparatus running
the country.

This is what happens when you assume that people are poor
because they are stupid, ignorant, or lacking, say, the right farming
implement. "Development," as Ferguson argues, consistently seems to
perpetuate itself in a world in which political explanations for poverty
are ignored and replaced with "technical" ones. People are poor, in
this logic, because they lack the right farming equipment, not because
they lack the ability to influence how their government distributes the
right farming equipment. And it is highly unpopular to question this
logic. After all, in the words of Brazilian Archbishop Helder
Camara, "when I give food to the poor, they call me a saint. When I ask
why the poor have no food, they call me a communist."

The same goes for disaster relief, which can save lives,
but which never seems to be accompanied by the question of why Africans
are perpetually faced with famine and starvation and thus in need of
help, except occasionally by the racist, ignorant segment of the
population that demands to know why we in the West are wasting our money
on "those people." One major reason for famines in Africa is IMF
policy; loans are often attached to conditions that include the
reduction or elimination of government intervention in the economy,
often with disastrous results for food security.

The hypocrisy of this is stunning: US agribusiness is heavily
subsidized by the American government, but if Malawi wants to pay its
people to grow food, the IMF will punish it by demanding harsh repayment
on debts that were mostly incurred when institutions like the IMF
loaned money knowingly to dictators who spent the funds on alcohol and Parisian
shopping trips. In multiple African countries, the IMF has demanded an
increase in exports, meaning farmers are told to grow cash crops for
sale in the West rather than staple foods for sale domestically. So,
much like during the potato famine in Ireland, when food was actually leaving
Ireland and being shipped to England even as people in Ireland starved
to death, famine in Africa is usually concurrent with food being shipped
from the starving country to countries where people are largely not
starving. It's just that the food is too expensive for the starving
people to buy.

So you're sitting at home, watching news clips of people starving in Africa (assuming there isn't something more important going on
in the news that day to push a famine off the newscast). You want to
help. What can you do? My advice is to follow these rules:

1. First do no harm. Many types of aid are
helpful (more on that later), but many types are not. Donating goods
can often undercut local businesses and economies and put people out of
work. Imagine if aliens dropped five million pizzas on Oakland
tomorrow. How would local pizza store owners and employees feel about
that? Giving to organizations that are involved in political situations
is also very dangerous unless you trust that organization to properly
understand the context in which it is working. Invisible Children,
producers of the "Kony 2012" video, is a perfect example of this. In
their (obviously accurate) push to denounce Joseph Kony, they have
essentially promoted the Ugandan government and the Sudan People's
Liberation Army as "good guys," which is not so obviously accurate. If you don't want your donated funds to go to warlords or to put people out of work, do your homework first.

2. Change your government. There are five
concrete things the United States government can do right now to
dramatically change the lives of millions of Africans. Stop supporting
dictators. Forgive odious debts. Change farm policy. Demilitarize on
the continent. Support renewable energy to prevent climate change.
Nothing we as individuals can do compares to the impact of those five
actions, and it's not even close. We have a democracy in this country,
albeit a flawed one, and even if you don't have your own Superpac, you
can still lobby your government to make change. If that seems daunting
and you just want to write a check, there are organizations working on
those very issues that could put those funds to good use. Jubilee USA works on the debt issue in a highly effective and economically efficient manner. 350.org
works on climate policy. It's not as fun as flying into the jungle on a
helicopter loaded with food supplies, but it's a lot more effective.

3. Give in sustainable ways. There are some
methods of giving that are more effective than others. I am on the
board of directors at Bridges of Promise, a non-profit that helps to
fund school fees for kids in rural Tanzania, and one problem our
students face is that they don't have enough school supplies. Rather
than donate 100 boxes of pencils, Bridges of Promise gave money in the
form of a small business grant to a Tanzanian entrepreneur to open a
stationary store. The end result is that families don't have to travel
five hours by bus to buy supplies, local people gain employment, and if
any kids still can't afford to buy pencils, donated funds can be used to
subsidize their purchases. When giving, ask yourself: how would this
donation impact a community as a whole? Why is this giving needed? If I
were poor, would I want this type of giving done in my community here
at home?

In the end, it's never a guarantee that anything we do to
help will in the end actually be helpful. But transforming the world
in which we live is impossible unless we act with both an open heart and
an open mind. Whether or not dropping food on people from helicopters
is a good idea probably depends on the circumstances. What is constant,
however, is the fact that if we worked to change American policy toward
Africa, we could stop debating how to feed and clothe people who would
not need our help being fed or clothed, if only our government stopped
funding their dictators, ruining their climate, and demanding they pay
back money they never borrowed in the first place. Essentially, people
in the west are donating money to Africa in a desperate attempt to paper
over the vast destruction done to the continent by western
institutions.

About Me

I am a graduate of the University of San Francisco's master's in International Studies Program, where I wrote my thesis on Odious Debt in Sub-Saharan Africa. This site will focus on African issues, particularly debt, politics, and U.S. foreign policy. I hope you find it interesting.
email: andrew.hanauer@gmail.com